The second day was dedicated to visiting Winnington Metal & Plastic Manufacturing: an important manufacturer of cookware and kitchen tools.
Integrating the supply chain
It surprised me to discover that this company, although its manufacturing site calls for new machinery, has implemented a mechanism in the supply chain allowing them to organise the work much better, reducing transportation lead times, and in general the time required to have the finished product available on the market. With selected costumers and suppliers they have implemented a system of what I would describe as active feedback, which informs continuously about the sales to the customer. In this manner they can activate their warehouse to prepare the load and the ship and eventually ship the goods to Europe.
Advantages of an integrated supply chain
The advantages are that the customer is better served, as they don’t have too high stocks of slow moving products and no out of stocks, while the manufacturer itself is less subject to the volatility of the market. In fact working like this you avoid the subjectivity of the human judgment, which often exaggerates the meaning of increasing/decreasing sales figures, creating erratic behaviours and confusion in the company. With this system it is possible to attenuate this issues by setting limits to the inventory, which, when reached, are triggering replenishment actions by the warehouse. In case those limits are reached too fast or too often, it might be the case to reconsider them. In order to implement this the company needed to involve their suppliers and customers in order to have an integrated supply chain: in order to do that they had to convince their suppliers to work based on this scheme, and this wasn’t an easy task, as many of them preferred the idea of selling one big batch and closing the operation until the next purchase. This might be theoretically true, but on the long run, it is more efficient as it enables you to lock in the customer while adding value for him.
Theory of Constraints
I’m thankful to the general manager for the presentation as it was really well explained and you could feel that who was explaining it, had to live it through, solving many issues. For example I have asked how they managed to convince their personnel that there still was room for improvement in a manufacturing process that has been executed and has delivered good results for so many years. The company, helped by a consultant, used the Theory of Constraints to analyse their current process and, by playing a game simulating the building of trucks, they were able to show how some principles of the theory could be implemented and to motivate their personnel.
Future challenges
As the Chinese workforce is getting more and more expensive the company is facing difficulties in keeping the current customers happy: some have already moved the manufacturing back to Europe, others have moved to other countries, like Vietnam, were the workforce is cheaper. Winnington Metal & Plastic Manufacturing is going to make good use of the industry 4.0 in order to regain competitiveness while keeping their uniqueness of having smaller batches but diversified products.
Before leaving…
… a picture of the whole SUPSI group!
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